Mr RANDALL (Canning) (13:03): I am pleased to speak on the Aged Care (Living Longer Living Better) Bill 2013 in the cognate debate with the other bills that have been described by previous members. I wish to briefly outline why we are here, the history of why we need to be here and then explain why this bill is relevant to my electorate of Canning.

We know that these bills are the legislative response to the government's aged-care reform package announced in April 2012 which, as I said, has been called Living Longer Living Better. The Aged Care (Living Longer Living Better) Bill 2013 seeks to remove the distinction between low-level and high-level residential care so there will only be one approval process. It provides a new means test combining income and assets tests, new annual and lifetime caps on means-tested aged care. It will allow accommodation costs to be paid through a refundable lump sum, a rental style periodic supplement or a combination of both. It will make changes to Home Care, including requiring a contribution for people that enter a home for care on or after 1 July 2014. It will establish a new aged-care pricing commissioner. It will extend the operation of the Accommodation Bonds Guarantee Scheme to new bond arrangements reflected in the government's reforms. It will establish the new Australian Aged Care Quality Agency to replace the Aged Care Standards and Accreditation Agency from 1 July 2014.

Why we are here is because in 2010 at the election Prime Minister Gillard said aged care would be a second term priority. We have seen the government undertake report after report and review after review, including 20 reviews and three Productivity Commission reports. If you remember, they did three reports here but they would not do one on the NBN. The Productivity Commission's Caring for older Australians report was publicly released by Prime Minister Gillard and Minister Butler on 8 August 2011. Instead of responding in any meaningful or quick way, Minister Butler embarked on more talking. He called it a national conversation but it was simply a talkfest. At their news conference, the Prime Minister did not respond to any of the 58 recommendations in this report. Finally, almost two-thirds of a year later—256 days later—on 20 April 2012 the Gillard government announced its Living Longer Living Better aged-care reform package in response to the Productivity Commission report. But this legislation which we are dealing with today cherry-picked a few of the recommendations made by the Productivity Commission.

We have some issues with this legislation. With this Living Longer Living Better announcement, whilst the headline figure of $3.7 billion over four years sounded impressive, the actual amount of new money—and I stress 'new money'—to be spent was only $577 million; in other words just over half a billion dollars over that four-year period. It is interesting, isn't it? The government—as we heard in the budget on Tuesday night—can come up with something like $5 billion as a knee-jerk reaction to illegal arrivals in this country, yet only half a billion dollars for the aged-care sector.

The so-called 'new' spending is a combination of means testing and simply cutting funding from one area and redirecting it to another—in other words, re-announcing it. It is worth noting that with this legislation many of the changes will not start, as I have already said several times, until 1 July 2014, well after the coming election, and it will be interesting to see whether Mr Butler gets an opportunity to have any say in its implementation.

There is no doubt that the aged-care system needs urgent change. The ageing of our population is one of the biggest social issues that we face as a country. We have an ageing population that is obviously living longer. Around nine per cent of our population is aged 70 years or older and this is expected to rise to 13 per cent by 2021 and 20 per cent by 2051. In the electorate of Canning, 10 per cent of the electorate's population is over 70 years of age according to the latest census data. That is why we need proper structural reform of the aged-care sector so that the care and wellbeing of our older Australians are properly managed and care providers can remain viable.

Unfortunately, this package of five bills does not resolve many of the outstanding viability issues for providers. The $1.6 billion cut to the aged-care funding instrument, ACFI, has caused great angst amongst care providers and has placed them under substantially more pressure. The ACFI changes were supposedly made because of spurious assertions of provider rorting. As the member for Ryan and others have made clear, despite these claims made by the minister of unusual claiming at estimates in February 2013, it was revealed that there have been no prosecutions in at least five years. So if there is an allegation, where is the follow-up? There is none. The minister said he would investigate these serious allegations, yet there has not been any report to date, and with four weeks of sitting left for this parliament, I suspect there will not be any.

In addition, this legislation will add even more regulation and more red tape to the already highly regulated sector. This is one of the things that makes it not only costly but also very, very difficult for them to do their job, the fundamental job that the providers are there for and that is to give quality aged care.

One dubious aspect of the legislation is that it seeks to establish the framework for the workforce compact, which will be potentially costly for providers and appears to be a mechanism to unionise the sector—and this has been spoken about by other speakers as well. The $1.6 billion cut to the ACFI will be used to finance the $1.2 billion workforce compact component—notice the $400,000 shortfall. Under the $1.2 billion workforce compact, providers with 50 or more beds need to enter into an enterprise bargaining agreement, in other words, an EBA to access this funding. Isn't it funny? It sounds like the 'no ticket no start' is out there again but this time in the aged-care sector. Providers with fewer than 50 beds need not enter into an EBA but must comply with the conditions of the compact to access funding. So if an employer meets the terms and conditions of the workforce compact, the aged-care workforce supplement will be paid. In other words: sign up or you will not get the money; join a union or you will not get the money.

The member for Ryan also pointed out the choices you have, one of them being the Health Services Union, the so-called discredited union that took the lowest-paid workers' fees and splurged them on themselves. We will not go into that now, but I think that it is one of the reasons that union is losing members.

If you are being paid award wages to get the workforce supplement, the employer will have to increase your pay by at least 5.2 per cent this coming financial year. If you are being paid according to an EBA, being paid at least 1.5 per cent above award wages to get the workforce supplement, your employer must increase your pay by at least 3.75 per cent this financial year. Trudi Hodges, the CEO of Dale Cottages—a residential accommodation centre in Armadale in my electorate—is rightly concerned about these wage increases as it affects their ability to pay their workers and attract staff.

No-one is saying that the wage increase is not a good thing. The Howard government oversaw real wage increases of more than 20 per cent during the term of that government. But rises in wages need to be affordable and sustainable. With only 40 per cent of residential aged-care providers operating in the black, they are rightly concerned. Eighty-nine per cent of the aged-care providers will suffer irrecoverable losses of revenue under the ACFI changes from 1 July as they already stand. The average loss per aged-care facility is more than $125,000 each year with some facing revenue shortfalls up to $560,000, with smaller and rural facilities most affected.

For example, again in my electorate, Irene Mooney, the CEO of Quambie Park, a small provider in the rural location of Waroona, also has grave concerns about this legislation. The feedback she has provided to me comes from a group of age-care providers known as the Small Providers Group. This is a group supported by Aged Care Services of Western Australia, one of WA's aged-care peak bodies. The feedback from this body of small providers says:

Indexation needs to be locked into subsidy payments on an annual basis (same as the current indexation application to basic daily care fees) for both Aged Care Funding Instruments (ACFI) and Community Care subsidies.

Time does not permit me to go into all of the ramifications of the recommendations but, briefly, the current costs of capital development and construction and refurbishment are not viably supported by the current supplement payment. Occupancy in rural and remote areas when a vacancy arises may take a period of time to fill and the geographical area et cetera affects a whole range of occupancy issues. Activity costs for these small providers are also an issue. The workforce compact in its current form is telling aged-care providers what they need to do in terms of their staff, yet it does not allow them to cover extra moneys.

I know how this local provider feels because, unlike the Labor government, the coalition is interested in working with providers for the best possible outcomes. She knows what the problem is and this coalition knows how they feel.

Aged and Community Services Western Australia, ACSWA, has made a submission to the Senate inquiry highlighting its serious concerns about the workforce supplement, particularly its impact on smaller regional, rural and remote aged-care providers. ACSWA has provided us with an example:

An aged care provider who operates a small 31-bed RRR facility would be eligible to receive $17,000 under the Workforce Supplement principles but in order to receive this, would have to commit to an additional $30,000 in wage supplementation support (that is, $47,000 in total). This amount additionally does not include on-costs for the provider which must also be absorbed.

In addition to the points mentioned above, one major area in aged-care reform that has been overlooked is a commitment to reduce the administrative burden that continues to hamper this sector. The coalition has been advised that aged-care nurses spend an average of a third of their time on paperwork, which takes them away from their caring duties. Under the Labor government proposals this can only get worse. The government's establishment of the Aged Care Funding Authority creates another bureaucracy—surprise, surprise—based in Canberra and trying to deal with people 3,000 kilometres away.

In contrast to the Labor government, the coalition wants to work in partnership with the aged-care sector to achieve real and sustainable reform through our first-ever four-year aged-care provider agreement. This will provide certainty for the aged-care industry and there has been a positive response to this aspect of certainty. This high-level interaction and level of certainty have been absent in recent years under the Labor administration. For example, the recent debacle with the ACFI cuts would not have happened if a four-year agreement had been in place.

While we will revise our policy closer to the election, the fundamental framework of the first-ever aged-care provider agreement will be retained. This agreement will deliver better and more affordable aged care because the crux of what we intend to do is: reduce red tape to enable nurses to get back to nursing residents; provide certainty, underpinned by a high-quality framework; deliver value for money through revised subsidy arrangements; ensure certainty for the aged-care workforce; establish a more flexible and viable aged-care provider network to meet care needs now and into the future; and ensure that the comfort and safety of older Australians are maximised.

The coalition wants this agreement to be in place within a year of taking office. As part of the process the coalition will establish a high-level aged-care provider agreement steering committee of key stakeholders to oversee the administration and implementation of the agreement and provide advice to the minister. In addition we will establish an aged-care provider arrangement working group, which will undertake the detailed design and project work required to give effect to the agreement. These measures will provide a formal pathway for a dialogue between the minister, the government and the stakeholders.

I cannot stress enough how the coalition values the input from the industry, who are the real experts in this area. The discussions with aged-care providers in my electorate have been invaluable. People like Trudi Hodges, the providers in Waroona and those right throughout the electorate are gravely concerned about funding going forward. At the moment it is very difficult for a provider to establish a business case. In fact, people are giving back their bed supplements and licences because they are unable to build a business case. While this is happening it takes away the opportunity for our frail and very aged Australians to seek quality aged care in this area. They deserve better. Should we be the government after 14 September we will provide that. This legislation does not provide that; it provides greater bureaucracy.